Barclays to pay back £500m in tax
The British Treasury has ordered Barclays to pay £500million in tax, a sum which the bank had been trying to avoid paying through a tax loophole.
The bank devised two schemes that meant it could avoid a large amount of taxation until HMRC, in a controversial move, introduced retrospective legislation in order to recover the money and make sure any further tax will be paid.
BBC Business Editor Robert Peston says the move is embarrassing for Barclays, and that “all Britain’s big banks have signed a code committing them not to engage in tax evasion.”
Government rules introduced in 2009 under Labour mean that anyone who has devised a supposedly legal tax evasion plan must notify the tax authorities within a few days of implementing it, and this is how the treasury learnt of Barclays’ scheme.
Exchequer Secretary to the Treasury David Gauke said: “We do not take today’s action lightly, but the potential tax loss from this scheme and the history of previous abuse in this area mean that this is a circumstance where the decision to change the law with full retrospective effect is justified.”
He added: “They are clearly taking a substantial reputational hit and we have demonstrated that banks are simply not going to be able to get away with it.”
This news comes a day after anti-capitalist protesters were evicted from their makeshift camp outside St Pauls; one of their demands was better regulation of the banks.